External Affairs Minister S Jaishankar on Tuesday said peace and tranquillity along the Line of Actual Control (LAC) are essential for normalising India-China relations, while Commerce and Industry Minister Piyush Goyal said India is working to rebuild ties with Beijing, though the outcome of the process remains uncertain.
Speaking at the Bloomberg New Economy Forum, Jaishankar said any disturbance along the border would have consequences for bilateral relations, while linking the expansion of trade and investment ties to stability along the frontier.
"The point we make to the Chinese is: 'If you want a normal relationship, if the rest of the relationship is to move, it's common sense -- It is a no-brainer that the boundary has to be stable and that we need peace and tranquillity in the border areas'," he said.
Goyal, speaking at the Bloomberg New Economy event on Wednesday, said India was open to business partnerships with countries that offered fair terms and a stable geopolitical environment.
"We are open to all countries around the world as long as we get a fair deal, as long as we ensure a continuity in the engagement, and as long as the geopolitical situation does not deteriorate. I think we had some concerns in the past. We are working to develop relations with China once again, but the last word has not yet been scripted on this journey," he said.
LAC stability and normalisation of ties
Jaishankar said the situation along the LAC had "settled down" to a great extent since 2024, with bilateral relations "commensurately moving towards normalcy."
The two countries have introduced several confidence-building measures in recent months to repair ties strained by the more than four-and-a-half-year military standoff in eastern Ladakh, which ended in late 2024.
On the possibility of allowing more Chinese investment in India following an "early harvest" agreement on the boundary question, Jaishankar said New Delhi was examining various options but was not making a resolution of the entire boundary dispute a prerequisite for business.
"We are now looking at those possibilities, and we have to see where we go. But we are not insisting that you have to solve the boundary issue in order to do business."
"What we are saying is: the bar is lower. The bar is: maintain peace and tranquillity. I wouldn't link the early harvest to anything other than the boundary question resolution. Anything we do on any policy we have on business, market access issues will be dealt with separately."
Trade imbalance remains a concern
Jaishankar flagged significant economic differences between the two countries, particularly India's trade deficit and the lack of market access for Indian businesses in China.
"We also have very major economic issues with China. If you look today at the trade balance, it is completely tilted (towards China)," he said.
"The tilt is extremely one-sided, and in many sectors where we have done well with the rest of the world, we have not had market access; we have not had a successful business operation for that sector in China," he said.
"We do believe today that we're not getting a level playing field in China in the manner in which we have given a level playing field to them," he noted.
Bilateral trade between India and China rose 7.9 per cent to USD 127.7 billion in 2025-26, from USD 118.39 billion in 2024-25. India's exports to China increased 36.62 per cent to USD 19.47 billion, while imports rose 16 per cent to USD 131.62 billion. The trade deficit widened to USD 99.19 billion from USD 85 billion in the previous fiscal.
India has also tightened its foreign direct investment policy for countries sharing land borders with it, including China.
Galwan clashes cast long shadow
Jaishankar recalled the 2020 Galwan Valley clashes, which severely strained bilateral relations after decades without fatalities along the border.
"From 1975 till 2020, a good 45 years, no blood was shed on that border. The last time there were fatalities was in 1975. In this period, India-China relations did grow," he said.
"Then in 2020, when we were in the midst of the Covid lockdown, we had a series of border issues, and it culminated in a clash in which a number of soldiers were killed on either side," he said.
"For us, what it represented was a very profound departure from the situation that was prevailing since 1975. If the peace and tranquillity in the border areas are disturbed, then the relationship will have consequences," he said.
Jaishankar said the consequences were evident over the following years until peace and tranquillity were restored.
Meanwhile, Prime Minister Narendra Modi met Chinese President Xi Jinping on September 12, 2026, on the sidelines of the BRICS Summit in India.